ATLANTA – The Georgia Dept. of Agriculture (GDA) released a new poultry pricing index called the Georgia Premium Poultry Pricing Index (GPPPI), which includes a series of producer price indexes that measure the aggregate change in the price of poultry sold on contract over one month, six month and 12 month base periods.
Every Tuesday, poultry producers will submit a complete list of quantities in pounds and price in cents of all sales of poultry on contract for the prior week. On Wednesday, the weighted geometric mean price and total sale volume collected from each company will be used to calculate the three price indexes, GDA said. The GPPPI will better reflect “a greater variability” of poultry products.
“The reported information will rely on a set number of commonly produced products; examples include whole bird, boneless skinless breast, bone in breast, wings and leg quarters among others, further processed products such as marinated product should not be included,” the agency explained. “By limiting the reporting specifically to products that are chicken only, the indexes will not be impacted by increases and decreases in input prices that are not directly related to the production of poultry.”
The GDA suspended its previous index, the Georgia Dock, in December after controversy and lack of adequate producer participation led the agency to develop a new poultry pricing tool. The GDA said it will report a percent change of sales volume for premium poultry on contract to indicate weekly change in demand. Also, the agency will use a random review process to verify all data, and all formulas and forms used to calculate the price indexes will be available for individual companies to track their own price indexes in relation to the industry aggregate index.
“GPPPI provides a useful tool for the poultry marketplace and removes any independent discretion on the reported price for poultry,” GDA said. “The model is designed to allow producers, processors, sellers and buyers the opportunity to track their specific products and how those products are priced in relation to the industry aggregate index. This will provide the ability for price discovery at any level of the supply chain, for all parties, and will offer a comprehensive view into the price trends of poultry currently in the marketplace, a tool for setting a benchmark price for premium poultry contracts and a viable solution for price discovery for buyers and sellers alike.”